How to match a credit note to an invoice

This article shows you how to apply a credit note to an invoice (also known as ‘netting off’).

A credit note is essentially a notice of a refund. It's a way of showing a customer that they don't have to pay the full amount of an invoice.

If no money is changing hands, for example if the work was cancelled or there was a mistake on the original invoice, you need to net off the credit note and invoice by matching them up. If you haven’t already created the credit note, you can either create one from an existing invoice or create a credit note from scratch.

Please note that if the credit note and invoice are for different contacts, you'll need to manually match them together.

1. Go to ‘Invoicing’

Navigate to the ‘Work’ tab at the top of the screen and select ‘Invoicing’ from the drop-down menu.

2. Open the relevant credit note

Click on the reference of the credit note.

3. Open the ‘Actions’ drop-down menu

Then select ‘Apply to invoice’.

4. Enter the value you want to apply

If you’re looking to use the entire credit note then enter its full value. Click ‘Apply credit’ when you’re done.

5. That’s it

The invoice and credit note are now netted off against each other and will show as settled in your account. If you view the credit note again in your ‘Invoicing’ overview, you’ll notice that its status has been updated to ‘Applied against invoice’. Similarly, the invoice you've applied the credit note to will update to a status of 'Cancelled by credit note’.

How to match an invoice to a credit note

As well as opening a credit note to match it to an invoice, you can also open an invoice and match it to a credit note. Once you’ve opened the relevant invoice, click on the ‘Actions’ drop-down and then select ‘Apply existing credit note'.

If you’re refunding a customer

If you need to refund a customer, make sure to explain the bank transaction as ‘Type: Credit Note Refund’ when it appears in your account.